PH debt servicing up to P877B in 2025 due to maturing loans

The Philippines is set to spend more to service its debt this year due mostly to the maturity of most of the loans made during the COVID-19 pandemic and the depreciation of the Philippine peso, the Department of Budget and Management (DBM) said Monday.

Under the proposed National Expenditure Program (NEP), the Philippines is set to spend P876.7 billion for debt payments next year, accounting for 13.8% of the P6.352 trillion budget the government has allocated for the coming year.

“’Yung increase po kasi nag-mature na karamihan dun sa mga loans natin nung panahon ng pandemic,” DBM secretary Amenah Pangandaman said in a press conference in Manila City.

“Nanghiram po tayo nung mga panahon na ‘yun and most it nag-mature na and at the same time, ‘yung forex (foreign exchange), exchange rates, and interest rates a little high and ‘yung sa forex natin gumalaw ng konti,” she added.

(The increase is due to our maturing loans from the pandemic. We borrowed during those times and most of them have matured and at the same time, the forex, exchange rates, and interest rates are a little high.)

The latest data available from the Bureau of the Treasury (BTr) shows that the government’s outstanding debt stood at P15.347 trillion as of end-May, 2.2% or P330.39 billion higher than P15.017 trillion as of  April.

The Philippines is set to spend P848.061 billion for interest payments this year, up from P670.525 billion this year, along with P7.068 million worth of bank charges.

The P6.352 trillion budget for 2025 reflects a 10.1% year-on-year growth from the P5.768-trillion budget for 2024, and is equivalent to 22.1% of the country’s gross domestic product.

The NEP was officially submitted to Congress on Monday, with P2.121 trillion going to social services, P1.853 trillion going to economic services, P1.083 trillion to general public services, P1419.3 billion to defense, and P876.7 billion to the debt burden.

In terms of agencies, the biggest increases were reported in the Departments of Transportation, Education, Interior and Local Government, National Defense, Agriculture, Finance, Foreign Affairs, Agrarian Reform, Justice, Information and Communications Technology, Science and Technology, and Environment and Natural Resources.—LDF, GMA Integrated News